An Analytical Model to Measure IS-Enabled Organizational Effectiveness

When business managers are considering whether to invest in an enterprise resource planning (ERP) system, they ask the question: “What are the returns on investment?” When the ERP system is implemented and in operation, business managers ask another question: “How successful is the system?” To answer these questions, clues can be found by examining organizational effectiveness improvements as a result of ERP system implementation. This paper suggests that being able to identify the dimensions of organizational effectiveness is enabled by ERP systems. Together with positive organizational effectiveness improvements, the business value of ERP systems can be demonstrated. To provide the evidence needed to support the notion, a confirmatory factor analysis (CFA) was conducted. Analyses reveal that the construct of IS-enabled organizational effectiveness can be modeled, at a higher-order abstraction level, as a third-order construct manifested by three second-order constructs and ten first-order constructs. DOI: 10.4018/978-1-4666-2464-1.ch012